Mar 9, 2004
The Rwenzori Coffee Company’s introduction of their range of premium ground coffees onto the South African market will play a significant role in strengthening trade links between South Africa and Uganda. According to Chairman and Managing Director, Andrew Rugasira, the agreement his company has signed with local retail giant Shoprite Checkers is a tremendous opportunity for Uganda.
Shoprite established its presence in Uganda when the retail group opened their first supermarket in Kampala in December 2000. During negotiations with Ugandan President Yoweri Museveni, the Rwenzori Coffee Company recognised a niche market opportunity. “We were confident of our ability to put a value-added coffee product of international quality on supermarket shelves, and the offer of collaboration from Shoprite CEO, Whitey Basson, gave us this possibility of access to the South African market,” states Rugasira.
He further explains that it requires a conscious effort with a high level of support from retailers to penetrate shelf space in any new market. “Shoprite has provided us with an amazing opportunity and has backed it up with overt support and encouragement. Our dream of supplying Rwenzori Finest Coffee to South African consumers has become a reality due to Shoprite’s commitment to Pan-African trade initiatives. South Africa is potentially a huge market for us and we believe that trade rather than aid is the best way to create economic growth,” says Rugasira. Initially Shoprite will provide shelf space, supported by market penetration and distribution throughout 110 Checkers Hyper stores nationally.
The government of Uganda is supportive of any trade initiative that seeks to position Uganda in the global market, generate foreign exchange and create employment opportunities. “Any value addition will be reinvested in resources at local level, which is why the government and the Ugandan Coffee Development Authority (UCDA) have given us their full backing.”
The UCDA is tasked with promoting Ugandan Coffee at a local production level as well as developing strategies for country’s largest exportable commodity. The penetration of unexplored new markets plays a significant role in developing both these goals. “We want to move Uganda away from its current position as the worlds 8th largest exporter of raw coffee to being a major player in the market segment where value-added coffee is sold and traded. We are also deeply committed to promoting locally sustainable fair trade initiatives,” says Rugasira.
Uganda currently produces 8-million tons of coffee beans annually. While coffee has historically been recognised as the country’s most important cash crop, there is considerable growth in less well-developed sectors such as, metals, tea and also non-traditional exports, such as floriculture, horticulture, and fish. According to Rugasira, projects such as the export of Rwenzori Finest Coffee to South Africa form an integral part of the Uganda’s plans for economic diversification and commitment to regional markets.
“In identifying primary export markets for Rwenzori Finest Coffee, we are initially focussing on South Africa because of the logistical benefits in terms of proximity and existing strategic relationships between our two countries. We feel we can grow in this market and make a significant contribution to the character of coffee consumption. We believe that the time is right to launch a quality African national coffee, and we look forward exploring other market opportunities such as China and Egypt.”
Rwenzori Finest Coffee consists of a range of three core products of individually chosen Arabica coffees. According to Rugasira, there has been a considerable increase in the global consumption of ground roast coffee and a clear shift from away instant coffees. “The industry has seen the emergence of speciality niche segments where consumers have become more conscious of quality and differentiation in terms of packaging, roasting and presentation. We believe that Rwenzori Finest Coffee offers a richly aromatic, full-bodied and well balanced blend that will be highly competitive in the existing South African market.”
Rugasira, a graduate of the London School of Economics, is confident that Rwenzori coffee will become a serious contender in the South African market within the next five years. “We are committed to providing a true value-for-money product and will not compromise on our high standards of quality. We are determined to live up to the opportunity we have been given,” affirms Rugasira.